What changed in this filing

/stocks — the workspaceLOADING

Item 1A. Risk Factors

2023-02-24 compared with 2022-02-25 · 205 added, 99 removed, 460 unchanged (40% of the section changed)

11 unchanged sentences

gathering, processing, marketing and transportation;

weather and seasonality;

weather and seasonality, including the physical effects of climate change;

hedging and commodity price derivatives;

1 unchanged sentence

◦ Given that our primary source of revenue is the sale of oil, natural gas and NGLs, one of our most material risks is the commodity market and the prices of oil, natural gas and NGLs, which are often volatile.

◦ The COVID-19 pandemic had a severe negative impact on worldwide economic activity in general, and on our industry specifically, and future effects remains uncertain.

◦ As a non-operator, we have only participated in wells operated by third parties, and thus rely extensively on third parties for the success of our business.

4 unchanged sentences

◦ Our existing and future debt obligations carry risks related to liquidity, operating and financial restrictions, debt service obligations, and related matters.

◦ The capped call transactions may affect the value of the Convertible Notes and our common stock.

◦ We are subject to counterparty performance risk with respect to the capped call transactions.

◦ The Convertible Notes may have a material effect on our reported financial results.

◦ The conditional conversion feature of the Convertible Notes, if triggered, may adversely affect our financial condition and operating results.

• Risks Related to Legal, Regulatory and Environmental Matters

◦ There are many environmental, energy, financial, real property and other regulations that we are required to comply with in the context of conducting our operations, otherwise, we may be exposed to fines, penalties, investigations, litigation or other legal proceedings.

◦ Negative public perception of the oil and natural gas industry, future climate change legislation or regulation, or increasing consumer demand for alternatives to oil and natural gas, could adversely impact our earnings, cash flows and financial position.

◦ There are many environmental, energy, financial, real property and other regulations that we and/or third-party operators of our wells are required to comply with in the context of conducting our operations, otherwise, we may be exposed to fines, penalties, investigations, litigation or other legal proceedings.

◦ Negative public perception of the oil and natural gas industry, future climate change legislation or regulation, increasing consumer demand for alternatives to oil and natural gas, or other climate-related transition risks could adversely impact our earnings, cash flows and financial position.

• Risks Related to Our Common Stock

◦ Our capital structure, as well as our certificate of incorporation, bylaws, and Delaware state law, subject our shareholders to risk of ownership dilution, loss of market value, and other risks.

◦ Our capital structure, as well as our certificate of incorporation, bylaws, and Delaware state law, subject our stockholders to risk of ownership dilution, loss of market value, and other risks.

◦ Any payment of future dividends will be at the discretion of our board of directors and will depend on, among other things, our earnings, financial condition, capital requirements, level of indebtedness, statutory and contractual restrictions applying to the payment of dividends and other considerations.

2 unchanged sentences

Risks Related to Our Business and the Oil, Natural Gas and NGL Industry

The COVID-19 pandemic has had, and may continue to have, a material adverse effect on our financial condition and results of operations.

We face risks related to public health crises, including the COVID-19 pandemic.

The effects of the COVID-19 pandemic, including travel bans, prohibitions on group events and gatherings, shutdowns of certain businesses, curfews, shelter-in-place orders and recommendations to practice social distancing in addition to other actions taken by both businesses and governments, resulted in a significant and swift reduction in international and U.S.

economic activity.

The collapse in the demand for oil caused by this unprecedented global health and economic crisis contributed to the significant decrease in crude oil prices in 2020 and had and could in the future continue to have a material adverse impact on our financial condition and results of operations.

Since the beginning of 2021, the distribution of COVID-19 vaccines progressed and many government-imposed restrictions were relaxed or rescinded.

However, we continue to monitor the effects of the pandemic on our operations.

As a result of the ongoing COVID-19 pandemic, our operations, and those of our operating partners, have and may continue to experience delays or disruptions and temporary suspensions of operations.

In addition, our results of operations and financial condition have been and may continue to be adversely affected by the ongoing COVID-19 pandemic.

The extent to which our operating and financial results are affected by COVID-19 will depend on various factors and consequences beyond our control, such as the emergence of more contagious and harmful variants of the COVID-19 virus, the duration and scope of the pandemic, additional actions by businesses and governments in response to the pandemic, and the speed and effectiveness of responses to combat the virus.

COVID-19, and the volatile regional and global economic conditions stemming from the pandemic, could also aggravate the other risk factors that we identify herein.

While the effects of the COVID-19 pandemic have lessened recently in the United States, we cannot predict the duration or future effects of the pandemic, or more contagious and harmful variants of the COVID-19 virus, and such effects may materially adversely affect our results of operations and financial condition in a manner that is not currently known to us or that we do not currently consider to present significant risks to our operations.

Oil and natural gas prices are volatile.

7 unchanged sentences

• changes in global supply and demand for oil and natural gas;

• the actions of OPEC and other major oil producing countries;

• the actions of OPEC and other major oil producing countries, such as Russia, relating to oil price and production levels, including announcements of potential changes to such levels;

• worldwide and regional economic, political and social conditions impacting the global supply and demand for oil and natural gas, which may be driven by various risks including war, terrorism, political unrest, or health epidemics (such as the global COVID-19 coronavirus outbreak);

• the price and quantity of imports of foreign oil and natural gas;

• the uncertainty in capital and commodities markets and the ability of oil and gas producers to access capital;

• increased focus by the investment community on sustainability practices in the oil and natural gas industry;

• political and economic conditions, including embargoes, in oil-producing countries or affecting other oil-producing activity;

• the outbreak of military hostilities, including escalating tensions between Russia and Ukraine and the potential destabilizing effect such conflict may pose for the European continent or the global oil and natural gas markets;

• the outbreak of military hostilities, including the ongoing conflict between Russia and Ukraine and the destabilizing effect such conflict continues to pose for the European continent or the global oil and natural gas markets;

• the level of global oil and natural gas exploration, production activity and inventories;

1 unchanged sentence

energy policy;

• weather conditions and outbreak of disease;

• weather conditions, chronic and acute climatic events associated with the effects of global climate change, and outbreak of disease;

• technological advances affecting energy consumption;

• the development, exploitation and market acceptance of alternative energy sources as part of a transition to a lower carbon economy;

• domestic and foreign governmental taxes, tariffs and/or regulations;

3 unchanged sentences

These factors and the volatility of the energy markets make it extremely difficult to predict oil and natural gas prices.

affect our future business, financial condition, results of operations, liquidity or ability to finance planned capital expenditures.

A substantial or extended decline in oil or natural gas prices, such as the significant and rapid decline that occurred in 2020, has resulted in and could result in future impairments of our proved oil and natural gas properties and may materially and adversely affect our future business, financial condition, results of operations, liquidity or ability to finance planned capital expenditures.

To the extent commodity prices received from production are insufficient to fund planned capital expenditures, we may be required to reduce spending or borrow or issue additional equity to cover any such shortfall.

33 unchanged sentences

Oil and natural gas reserve engineering requires subjective estimates of underground accumulations of oil and/or natural gas and assumptions concerning future oil and natural gas prices, production levels, and operating, exploration and development costs.

reserve estimates are made without the benefit of a lengthy production history and are less reliable than estimates based on a lengthy production history.

Some of our reserve estimates are made without the benefit of a lengthy production history and are less reliable than estimates based on a lengthy production history.

As a result, estimated quantities of proved reserves and projections of future production rates and the timing of development expenditures may prove to be inaccurate.

4 unchanged sentences

Numerous changes over time to the assumptions on which our reserve estimates are based result in the actual quantities of oil, natural gas and NGLs we ultimately recover being different from our reserve estimates.

Any significant variance could materially affect the estimated quantities and present value of reserves shown in this Annual Report on Form 10-K, subsequent reports we file with the SEC or other company materials.

Any significant variance could

materially affect the estimated quantities and present value of reserves shown in this Annual Report on Form 10-K, subsequent reports we file with the SEC or other company materials.

Our future success depends on our ability to replace reserves that our operators produce.

21 unchanged sentences

The marketability of our oil and natural gas depends in part on the availability, proximity and capacity of pipeline systems, processing facilities, oil trucking fleets and rail transportation assets owned by third parties.

The lack of available capacity on these systems and facilities, whether as a result of proration, growth in demand outpacing growth in capacity, physical damage, scheduled maintenance, legal or other reasons such as suspension of service due to legal challenges (see below regarding the Dakota Access Pipeline), could result in a substantial increase in costs, declines in realized commodity

prices, the shut-in of producing wells or the delay or discontinuance of development plans for our properties.

In recent periods, we experienced significant delays and production curtailments, and declines in realized natural gas prices, that we believe were due in part to gas gathering and processing constraints in the Williston Basin.

5 unchanged sentences

The Dakota Access Pipeline (“DAPL”), a major pipeline transporting crude oil from the Williston Basin, is subject to ongoing litigation (the “DAPL Litigation”) that could threaten its continued operation.

In July 2020, a federal district court ordered DAPL to be shut down pending the completion of an environmental impact statement (“EIS”) to determine whether the DAPL poses a threat to the Missouri River and drinking water supply of the Standing Rock Sioux Reservation.

In July 2020, a federal district court ordered DAPL to be shut down pending the completion of an environmental impact statement (“EIS”) to determine whether the

DAPL poses a threat to the Missouri River and drinking water supply of the Standing Rock Sioux Reservation.

DAPL currently remains in operation while the U.S.

Army Corps of Engineers (“USACE”) conducts the review, which is currently anticipated to be completed in the fall of 2022.

Army Corps of Engineers (“USACE”) conducts the review, which is currently anticipated to be completed in the spring of 2023.

In addition, on September 20, 2021, the owner of DAPL filed a petition with the U.S.

Supreme Court seeking review of the lower courts’ decisions requiring a new EIS and permit.

Supreme Court has not yet decided whether to accept the case for review.

Supreme Court seeking review of the lower courts’ decisions requiring a new EIS and permit, which was denied in February 2022.

Following completion of the EIS, the USACE will determine whether to grant DAPL an easement to cross the Missouri River or to shut down the pipeline, unless the U.S.

22 unchanged sentences

This could limit access to jobsites and operators’ ability to service wells in these areas.

We are subject to physical risks arising from climate change, which may have a negative impact on our business and results of operations.

Many scientists have concluded that increasing concentrations of GHG in the earth’s atmosphere may produce significant physical effects, such as increased frequency and severity of storms, droughts and floods, among other climatic phenomena.

The physical effects of adverse weather conditions, such as increased frequency and severity of droughts, storms, floods and other climatic events, could adversely affect or delay demand for oil and natural gas products or cause us or our third party operators to incur significant costs in preparing for, or responding to, the effects of climatic events themselves, which may not be fully insured.

Energy needs could increase or decrease as a result of extreme weather conditions depending on the duration and magnitude of any such climate changes.

A decrease in energy use due to weather changes may affect our financial condition through decreased revenues.

To the extent the frequency of extreme weather events increases, this could impact our business in various ways, including damage to operators’ facilities at our properties or increased insurance premiums.

Any of these effects could have an adverse effect on our business, results of operations and financial condition.

As a non-operator, our development of successful operations relies extensively on third parties, which could have a material adverse effect on our results of operation.

22 unchanged sentences

The inability or failure of our operating partners to meet their obligations to us or their insolvency or liquidation may adversely affect our financial results.

Continuing or worsening inflationary issues and associated changes in monetary policy have resulted in and may result in additional increases to the cost of our goods, services and personnel, which in turn cause our capital expenditures and operating costs to rise.

Inflation has been an ongoing concern in the U.S.

Ongoing inflationary pressures have resulted in and may result in additional increases to the costs of goods, services and personnel, which in turn cause our capital expenditures and operating costs to rise.

Sustained levels of high inflation caused the U.S.

Federal Reserve and other central banks to increase interest rates multiple times in 2022 in an effort to curb inflationary pressure on the costs of goods and services, which could have the effects of raising the cost of capital and depressing economic growth, either of which (or the combination thereof) could hurt the financial and operating results of our business.

To the extent elevated inflation remains, we may experience further cost increases for our operations.

We could experience periods of higher costs as activity levels fluctuate or if commodity prices rise.

5 unchanged sentences

Any delay in the drilling of new wells or significant increase in drilling costs could reduce our revenues and cash flows.

The COVID-19 pandemic had, and events beyond our control, including a global or domestic health crisis, may have, a material adverse effect on our financial condition and results of operations.

We face risks related to public health crises, including the COVID-19 pandemic.

economic activity in 2020.

The collapse in the demand for oil caused by this unprecedented global health and economic crisis contributed to the significant decrease in crude oil prices in 2020 and had a material adverse impact on our financial condition and results of operations.

Since the beginning of 2021, the distribution of COVID-19 vaccines progressed and many government-imposed restrictions were relaxed or rescinded.

However, we continue to monitor the effects of the pandemic on our operations.

The impact of any new, more contagious or harmful COVID-19 variants that may emerge, and the effectiveness of COVID-19 vaccines against variants and the related responses by governments, including reinstated government-imposed lockdowns or other measures, cannot be predicted at this time.

Both the health and economic aspects of the COVID-19 pandemic remain highly fluid and the future course of each is uncertain.

We cannot foresee whether the outbreak of COVID-19 will be effectively contained on a sustained basis, nor can we predict the severity and duration of its impact or the occurrence of other events beyond our control, including other potential global or domestic health crisis.

If the impact of COVID-19 is not effectively and timely controlled on a sustained basis going forward, or if other events beyond our control, including other potential global or domestic health crisis, were to emerge, our business operations and financial condition may be materially and adversely affected by factors that we cannot foresee.

While we have not incurred significant disruptions to our operations during the years ended December 31, 2022 and 2021 as a direct result of the COVID-19 pandemic, the continuation of the COVID-19 pandemic may materially and adversely affect, our business, operating and financial results and liquidity in the future.

To the extent the COVID-19 pandemic or another public health crisis adversely affects our business and financial results, it may also have the effect of heightening many of the other risks set forth in this Risk Factors section of this Form 10-K, such as those relating to our financial performance and debt obligations.

We are unable to provide any prediction as to the ultimate adverse impact of COVID-19 on our business, which will depend on numerous evolving factors and future developments, including its effect on the demand for oil, natural gas, and NGLs, the response of the overall economy and the financial markets as well as the effect of governmental actions taken in response thereto.

Any of these outcomes could have a material adverse effect on our business, operations, financial results and liquidity

The development of our proved undeveloped reserves may take longer and may require higher levels of capital expenditures than we currently anticipate.

6 unchanged sentences

We intend to continue to expand our operations in part through acquisitions.

Our decision to acquire a property will depend in part on the evaluation of data obtained from production reports and engineering studies, geophysical and geological

analyses and seismic and other information, the results of which are often inconclusive and subject to various interpretations.

Our decision to acquire a property will depend in part on the evaluation of data obtained from production reports and engineering studies, geophysical and geological analyses and seismic and other information, the results of which are often inconclusive and subject to various interpretations.

Also, our reviews of acquired properties are inherently incomplete because it generally is not economically feasible to perform an in-depth review of the individual properties involved in each acquisition.

6 unchanged sentences

• the ultimate value of any contingent consideration agreed to be paid in an acquisition;

• dilution to shareholders if we use equity as consideration for, or to finance, acquisitions;

• dilution to stockholders if we use equity as consideration for, or to finance, acquisitions;

• the assumption of unknown liabilities, losses or costs for which we are not indemnified or for which our indemnity is inadequate;

31 unchanged sentences

The members of our management team may terminate their employment with our company at any time.

If we were to lose members of our management team, we may not be able to replace the knowledge or relationships that they possess and our ability to execute our business plan could be materially harmed.

If we were to lose members of our

management team, we may not be able to replace the knowledge or relationships that they possess and our ability to execute our business plan could be materially harmed.

Deficiencies of title to our leased interests could significantly affect our financial condition.

30 unchanged sentences

If the actual amount of production is lower than the notional amount that is subject to our derivative financial instruments, we might be forced to satisfy all or a portion of our derivative transactions without the benefit of the cash flow from our sale of the underlying physical commodity, resulting in a substantial diminution of our liquidity.

As a result of these factors, our hedging activities may not be as effective as we intend in reducing the volatility of our cash flows, and in certain circumstances may actually increase the volatility of our cash flows.

As a result of

these factors, our hedging activities may not be as effective as we intend in reducing the volatility of our cash flows, and in certain circumstances may actually increase the volatility of our cash flows.

In addition, such transactions may expose us to the risk of loss in certain circumstances, including instances in which a counterparty to our derivative contracts is unable to satisfy its obligations under the contracts;

17 unchanged sentences

however, there can be no assurance that we will not suffer material losses in the future.

Fuel conservation measures, technological advances and negative shift in market perception towards the oil and natural gas industry could reduce demand for oil and natural gas.

Our business is subject to climate-related transition risks, including evolving climate change legislation, fuel conservation measures, technological advances and negative shift in market perception towards the oil and natural gas industry could result in increased operating expenses and capital costs, financial risks and potential reduction in demand for oil and natural gas.

Combating the effects of climate change continues to attract considerable attention in the United States and internationally, including from regulators, legislators, companies in a variety of industries, financial market participants and other stakeholders.

This focus, together with changes in consumer and industrial/commercial behavior, preferences and attitudes with respect to the generation and consumption of energy, petroleum products and the use of products manufactured with, or powered by, petroleum products, may in the long-term result in (i) the enactment of climate change-related regulations, policies and initiatives (at the government, regulator, corporate and/or investor community levels), including alternative energy requirements, new fuel consumption standards, energy conservation and emissions reductions measures and responsible energy development, (ii) technological advances with respect to the generation, transmission, storage and consumption of energy ( e.g.

, wind, solar and hydrogen power, smart grid technology and battery technology, increasing efficiency) and (iii) increased availability of, and increased consumer and industrial/commercial demand for, alternative energy sources and products manufactured with, or powered by, alternative energy sources ( e.g.

, electric vehicles and renewable residential and commercial power supplies).

Climate change legislation and regulatory initiatives may arise from a variety of sources, including international, national, regional and state levels of government and associated administrative bodies, seeking to monitor, restrict or regulate existing emissions of GHGs, such as carbon dioxide and methane, as well as to restrict or eliminate future emissions.

Accordingly, our business and operations, and those of our operating partners, are subject to executive, regulatory, political and

financial risks associated with oil and natural gas services and products and the emission of GHGs.

Any legislation or regulatory programs related to climate change could increase our costs and require substantial capital, compliance, operating and maintenance costs, and reduce demand for oil and natural gas products and services.

See further discussion in the risk factor further below entitled “ The adoption of climate change legislation or regulations restricting or relating to emissions of GHGs could result in increased operating costs and reduced demand for the oil and natural gas we produce.

Fuel conservation measures, alternative fuel requirements, increasing consumer demand for alternatives to oil and natural gas, technological advances in fuel economy and energy generation devices, and the increased competitiveness of alternative energy sources could reduce demand for oil and natural gas.

Additionally, the increased competitiveness of alternative energy sources (such as electric vehicles, wind, solar, geothermal, tidal, fuel cells and biofuels) could reduce demand for oil and natural gas and, therefore, our revenues.

Such developments may also adversely impact, among other things, the availability to operators at our properties of necessary third-party services and facilities that they rely on or impact the market prices of or our operating partners’ access to raw materials, which may adversely affect our ability to successfully carry out our business strategy.

Additionally, certain segments of the investor community have recently expressed negative sentiment towards investing in the oil and natural gas industry.

Recent equity returns in the sector versus other industry sectors have led to lower oil and natural gas representation in certain key equity market indices.

Climate change-related developments in particular may result in negative perceptions of the traditional oil and gas industry and, in turn, reputational risks associated with exploration and production activities.

There have been efforts in recent years, for example, to influence the investment community, including investment advisors, insurance companies and certain sovereign wealth, pension and endowment funds and other groups, by promoting divestment of fossil fuel equities and pressuring lenders to limit funding and insurance underwriters to limit coverages to companies engaged in the extraction of fossil fuel reserves.

Financial institutions may elect in the future to shift some or all of their investment into non-fossil fuel related sectors.

Some investors, including certain pension funds, university endowments and family foundations, have stated policies to reduce or eliminate their investments in the oil and natural gas sector based on social and environmental considerations.

Furthermore, certain other stakeholders have pressured commercial and investment banks to stop funding oil and gas projects.

With the continued volatility in oil and natural gas prices, and the possibility that interest rates will rise in the near term, increasing the cost of borrowing, certain investors have emphasized capital efficiency and free cash flow from earnings as key drivers for energy companies, especially shale producers.

This may also result in a reduction of available capital funding for potential development projects, further impacting our future financial results.

The impact of the changing demand for oil and natural gas services and products, together with a change in investor sentiment, may have a material adverse effect on our business, financial condition, results of operations and cash flows.

Ultimately, any legislation, regulatory programs, technological advances or social pressures related to climate change could increase our operating and compliance costs, reduce demand for oil and natural gas services and products, together with a change in investor sentiment, may have a material adverse effect on our business, financial condition, results of operations and cash flows.

Furthermore, if we are unable to achieve the desired level of capital efficiency or free cash flow within the timeframe expected by the market, our stock price may be adversely affected.

Increased attention to environmental, social and governance (“ESG”) matters may impact our business.

Increasing attention to climate change, increasing societal expectations on companies to address climate change, increasing investor and societal expectations regarding voluntary ESG disclosures, and potential increasing consumer demand for alternative forms of energy may result in increased costs, reduced demand for our products, reduced profits, increased investigations and litigation, and negative impacts on our access to capital markets.

Increasing attention to climate change, for example, may result in demand shifts for natural gas and oil products and additional governmental investigations and private litigation against us.

Increased scrutiny and changing stakeholder expectations with respect to environmental, social and governance (“ESG”) matters may impact our business and expose us to additional risks.

In recent years, companies across all industries are facing increasing scrutiny from stakeholders related to their ESG and sustainability practices.

A number of advocacy groups, both domestically and internationally, have campaigned for governmental and private action to promote change at public companies related to ESG matters, including increasing attention and demands for action related to climate change, promoting the use of substitutes to fossil fuel products and encouraging the divestment of companies in the fossil fuel industry.

Increasing attention to climate change, for example, may result in demand shifts for natural gas and oil products, additional governmental investigations, private litigation against us, operational delays or restrictions, increased operating costs, and additional regulatory burdens.

To the extent that societal pressures or political or other factors are involved, it is possible that such liability could be imposed without regard to our causation of or contribution to the asserted damage, or to other mitigating factors.

For example, claims have been made against certain companies in the energy industry alleging that GHG emissions from oil and natural gas operations constitute a public nuisance under federal and/or state common law, or alleging that the companies have been aware of the adverse effects of climate change for some time but failed to adequately disclose such impacts to their investors or customers.

As a result, private individuals or public entities may seek to enforce environmental laws and regulations against us and could allege personal injury, property damages or other liabilities.

While our business is not a party to any such litigation, we could be named in actions making similar allegations.

An unfavorable ruling in any such case could significantly impact our operations and could have an adverse impact on our financial condition.

Moreover, governmental authorities exercise considerable discretion in the timing and scope of permit issuance and the public may engage in the permitting process, including through intervention in the courts.

Negative public perception could cause the permits our operating partners need to conduct their operations to be withheld, delayed or burdened by requirements that restrict our ability to profitably conduct our business.

Further, failure or a perception (whether or not valid) of failure to implement our ESG strategy or achieve sustainability goals we have set could damage our reputation, causing our investors or other stakeholders to lose confidence in our company, and negatively impact our operations.

There can be no assurance that we will be able to accomplish any announced goals, initiatives, commitments or objectives related to our ESG strategy, as statements regarding the same reflect our current plans and aspirations and are not guarantees that we will be able to achieve them within the timelines we announce, or at all.

We in certain circumstances could determine in our discretion that it is not feasible or practical to implement or complete certain of our ESG goals, initiatives, policies or procedures based on cost, timing or other considerations.

Our continuing efforts to research, establish, accomplish and accurately report on the implementation of our ESG strategy, including any ESG goals, may also create additional operational risks and expenses and expose us to reputational, legal and other risks.

Moreover, while we create and publish voluntary disclosures regarding ESG matters from time to time, some of the statements in those voluntary disclosures may be based on hypothetical expectations and assumptions that may or may not be representative of current or actual risks or events or forecasts of expected risks or events, including the costs associated therewith.

Such expectations and assumptions are necessarily uncertain and may be prone to error or subject to misinterpretation given the long timelines involved and the lack of an established single approach to identifying, measuring and reporting on many ESG matters.

The occurrence of any of the foregoing could have a material adverse effect on our business and financial condition.

Further, our business and growth opportunities require us to have strong relationships with various key stakeholders, including our stockholders, employees, suppliers, customers, local communities and others.

We may face pressures from stakeholders, many of whom are increasingly focused on climate change, to prioritize sustainable energy practices, reduce our carbon footprint and promote sustainability while at the same time remaining a successfully operating public company.

If we do not successfully manage expectations across these varied stakeholder interests, it could erode our stakeholder trust and thereby affect our brand and reputation.

Such erosion of confidence could negatively impact our business through decreased demand and growth opportunities, delays in projects, increased legal action and regulatory oversight, adverse press coverage and other adverse public statements, difficulty hiring and retaining top talent, difficulty obtaining necessary approvals and permits from governments and regulatory agencies on a timely basis and on acceptable terms and difficulty securing investors and access to capital.

In addition, organizations that provide information to investors on corporate governance and related matters have developed ratings processes for evaluating companies on their approach to ESG matters.

Such ratings are used by some investors to inform their investment and voting decisions.

Unfavorable ESG ratings and recent activism directed at shifting funding away from companies with energy-related assets could lead to increased negative investor sentiment toward us and our industry and to the diversion of investment to other industries, which could have a negative impact on our stock price and our access to and costs of capital.

Also, institutional lenders may, of their own accord, elect not to provide funding for fossil fuel energy companies based on climate change related concerns, which could affect our access to capital for potential growth projects.

Such ratings are used by some investors to inform their investment and voting decisions and thus unfavorable ESG ratings could have a negative impact on our stock price and our access to and costs of capital.

Risks Related to Our Financing and Indebtedness

13 unchanged sentences

Our Revolving Credit Facility and other agreements governing indebtedness contain operating and financial restrictions that may restrict our business and financing activities.

Our Revolving Credit Facility, the indenture governing our senior indebtedness, and any future indebtedness we incur may contain a number of restrictive covenants that will impose significant operating and financial restrictions on us, including restrictions on our ability to, among other things:

Our Revolving Credit Facility, the indenture governing our Senior Notes due 2028 (the “Senior Notes Indenture”), and any future indebtedness we incur may contain a number of restrictive covenants that will impose significant operating and

financial restrictions on us, including restrictions on our ability to, among other things:

declare or pay any dividend or make any other distributions on, purchase or redeem our equity interests or purchase or redeem certain debt;

18 unchanged sentences

In addition, our obligations under the Revolving Credit Facility are collateralized by perfected liens and security interests on substantially all of our assets and if we default thereunder the lenders could seek to foreclose on our assets.

We may not be able to generate enough cash flow to meet our debt obligations or our obligations related to our preferred stock.

We may not be able to generate enough cash flow to meet our debt obligations.

We expect our earnings and cash flow to vary significantly from year to year due to the cyclical nature of our industry.

As a result, the amount of debt that we can service in some periods may not be appropriate for us in other periods.

Additionally, our future cash flow may be insufficient to meet our debt obligations and commitments, or to permit us to pay dividends on our preferred stock.

Additionally, our future cash flow may be insufficient to meet our debt obligations and commitments.

Any insufficiency could negatively impact our business.

A range of economic, competitive, business and industry factors will affect our future financial performance, and, as a result, our ability to generate cash flow from operations and to pay our debt or dividends on our preferred stock.

A range of economic, competitive, business and industry factors will affect our future financial performance, and, as a result, our ability to generate cash flow from operations and to pay our debt.

Many of these factors, such as oil and natural gas prices, economic and financial conditions in our industry and the global economy or competitive initiatives of our competitors, are beyond our control.

3 unchanged sentences

or seeking to raise additional capital.

However, we cannot assure you that undertaking alternative financing plans, if necessary, would allow us to meet our debt obligations or pay dividends on our preferred stock.

Our inability to generate sufficient cash flow to satisfy our debt obligations or pay dividends on our preferred stock, or to obtain alternative financing, could materially and adversely affect our business, financial condition, results of operations and prospects.

Our ability to pay dividends to our stockholders is restricted by applicable laws and regulations and requirements under certain of our securities and debt agreements, including the Series A Preferred Stock, our Revolving Credit Facility and the 2028 Notes (as collectively defined below).

However, we cannot assure you that undertaking alternative financing plans, if necessary, would allow us to meet our debt obligations.

Our inability to generate sufficient cash flow to satisfy our debt obligations, or to obtain alternative financing, could materially and adversely affect our business, financial condition, results of operations and prospects.

Our ability to pay dividends to our stockholders is restricted by applicable laws and regulations and requirements under certain of our debt agreements, including our Revolving Credit Facility and the Senior Notes (as defined below).

Holders of our common stock are only entitled to receive such cash dividends as our board of directors, in its sole discretion, may declare out of funds legally available for such payments.

4 unchanged sentences

We cannot assure you, however, that we will pay dividends in the future in the current amounts or at all.

Our board of directors may change the timing and amount of any future dividend payments or eliminate the payment of future dividends to

our common stockholders at its discretion, without notice to our stockholders.

Our board of directors may change the timing and amount of any future dividend payments or eliminate the payment of future dividends to our common stockholders at its discretion, without notice to our stockholders.

Any future determination relating to our dividend policy will be dependent on a variety of factors, including our financial condition, earnings, legal requirements, our general liquidity needs, and other factors that our board of directors deems relevant.

Our ability to declare and pay dividends to our stockholders is subject to certain laws, regulations, and policies, including minimum capital requirements and, as a Delaware corporation, we are subject to certain restrictions on dividends under the Delaware General Corporation Law (the “DGCL”).

Our ability to declare and pay dividends to our stockholders is subject to certain laws, regulations, and policies, including minimum capital requirements and, as a Delaware

corporation, we are subject to certain restrictions on dividends under the DGCL.

Under the DGCL, our board of directors may not authorize payment of a dividend unless it is either paid out of our surplus, as calculated in accordance with the DGCL, or if we do not have a surplus, it is paid out of our net profits for the fiscal year in which the dividend is declared and/or the preceding fiscal year.

In addition, so long as any shares of our Series A Preferred Stock remain outstanding, no dividend or distribution may be declared or paid on our common stock unless all accumulated and unpaid dividends on the Series A Preferred Stock for all preceding dividend periods have been or contemporaneously are declared and paid in full.

Finally, our ability to pay dividends to our stockholders may be limited by covenants in any debt agreements that we are currently a party to, including our Revolving Credit Facility and the indenture governing our 2028 Notes, or may enter into in the future.

Finally, our ability to pay dividends to our stockholders may be limited by covenants in any debt agreements that we are currently a party to, including our Revolving Credit Facility and the Senior Notes Indenture, or may enter into in the future.

As a consequence of these various limitations and restrictions, we may not be able to make, or may have to reduce or eliminate at any time, the payment of dividends on our common stock.

4 unchanged sentences

If interest rates increase and we are unable to effectively hedge our interest rate risk, our debt service obligations on the variable rate indebtedness would increase even if the amount borrowed remained the same, and our net income and cash available for servicing our indebtedness would decrease.

Changes in the method of determining LIBOR, or the replacement of LIBOR with an alternative reference rate, may adversely affect interest rates under our revolving credit agreement.

LIBOR is a basic rate of interest widely used as a global reference for setting interest rates on loans and payment rates on other financial instruments.

Our revolving credit agreement uses LIBOR as the reference rate for Eurodollar denominated borrowings.

As of January 1, 2022, regulated banks are required to cease “new” US dollar LIBOR issuances (including new commitments, renewals and extensions) and all existing US dollar LIBOR loans must transition to an alternative rate by June 30, 2023.

Until that time, it is unclear how different reference rates will develop.

It is impossible to predict the effect these developments, the discontinuance, modification or other reforms to LIBOR or the establishment of alternative reference rates may have on LIBOR, other benchmark rates or floating rate debt instruments.

Although our revolving credit agreement contains LIBOR alternative provisions which provide for the replacement of LIBOR, upon certain triggering events, with a rate based on the secured overnight financing rate published by the Federal Reserve Bank of New York, new methods of calculating reference rates or other reforms could cause the interest rates under our revolving credit agreement to be materially different than expected, which could have an adverse effect on our business, financial position and results of operations, and our ability to pay dividends on our common stock.

In June 2022, we amended and restated the existing credit agreement governing the Revolving Credit Facility to, among other things, replace LIBOR with SOFR.

After giving effect to the credit agreement amendment and restatement, any borrowings under our Revolving Credit Facility are primarily based on SOFR.

It is unknown whether SOFR will attain market acceptance as a replacement for LIBOR and, because SOFR differs fundamentally from LIBOR, there is no assurance that SOFR will perform in the same way as LIBOR would have performed at any time, and there is no guarantee that it is a comparable substitute for LIBOR.

As a result, we cannot reasonably predict the potential effect of the establishment of alternative reference rates on our business, financial condition or results of operations.

We may be able to incur substantially more debt.

This could further exacerbate the risks associated with our substantial indebtedness.

We may be able to incur substantial additional indebtedness in the future, subject to certain limitations, including under our Revolving Credit Facility, our senior notes and under any future debt agreements.

We may be able to incur substantial additional indebtedness in the future, subject to certain limitations, including under our Revolving Credit Facility, the Senior Notes and under any future debt agreements.

If new debt is added to our current debt levels, the related risks that we now face could increase.

6 unchanged sentences

Cash reserves, cash from operations and borrowings under our Revolving Credit Facility may not be sufficient to fund our continuing operations and business plan and goals.

We may require additional capital and we

may be unable to obtain such capital if and when required.

We may require additional capital and we may be unable to obtain such capital if and when required.

If our access to capital were limited due to numerous factors, which could include a decrease in operating cash flow due to lower oil and natural gas prices or decreased production or deterioration of the credit and capital markets, we would have a reduced ability to develop our properties, replace our reserves and pursue our business plan and goals.

1 unchanged sentence

If the amount of capital we are able to raise from financing activities, together with our cash from operations, is not sufficient to satisfy our capital requirements, we may not be able to implement our business plan and may be required to scale back our operations, sell assets at unattractive prices or obtain financing on unattractive terms, any of which could adversely affect our business, results of operations and financial condition.

The capped call transactions may affect the value of the Convertible Notes and our common stock.

In connection with the pricing of the Convertible Notes, we entered into privately negotiated capped call transactions relating to such notes with the option counterparties.

The capped call transactions relating to the Convertible Notes cover, subject to customary adjustments, the number of shares of our common stock that initially underlie such notes.

The capped call

transactions are expected generally to reduce the potential dilution to our common stock upon any conversion of the Convertible Notes and/or offset any potential cash payments we are required to make in excess of the principal amount of converted notes, as the case may be, with such reduction and/or offset subject to a cap.

The option counterparties and/or their respective affiliates may modify their hedge positions by entering into or unwinding various derivatives with respect to our common stock and/or purchasing or selling our common stock or other securities of ours in secondary market transactions prior to the maturity of the Convertible Notes (and are likely to do so during any observation period related to a conversion of such notes).

This activity could also cause or avoid an increase or a decrease in the market price of our common stock or the Convertible Notes, which could affect a holder’s ability to convert their Convertible Notes and, to the extent the activity occurs following conversion or during any observation period related to a conversion of the Convertible Notes, it could affect the amount and value of the consideration that a holder will receive upon conversion of such notes.

The potential effect, if any, of these transactions and activities on the market price of our common stock or the Convertible Notes will depend in part on market conditions and cannot be ascertained at this time.

Any of these activities could adversely affect the value of our common stock and the value of the Convertible Notes (and as a result, the amount and value of the consideration that a holder would receive upon the conversion of the Convertible Notes) and, under certain circumstances, a holder’s ability to convert their Convertible Notes.

We do not make any representation or prediction as to the direction or magnitude of any potential effect that the transactions described above may have on the price of the Convertible Notes or our common stock.

In addition, we do not make any representation that the option counterparties or their respective affiliates will engage in these transactions or that these transactions, once commenced, will not be discontinued without notice.

We are subject to counterparty risk with respect to the capped call transactions, and the capped call may not operate as planned.

The option counterparties to the capped call transactions are financial institutions, and we will be subject to the risk that one or more of the option counterparties may default or otherwise fail to perform, or may exercise certain rights to terminate their obligations, under the capped call transactions.

Our exposure to the credit risk of the option counterparties will not be secured by any collateral.

Global economic conditions have from time to time resulted in the actual or perceived failure or financial difficulties of many financial institutions.

If an option counterparty to one or more capped call transactions becomes subject to insolvency proceedings, we will become an unsecured creditor in those proceedings with a claim equal to our exposure at that time under our transactions with that option counterparty.

Our exposure will depend on many factors but, generally, the increase in our exposure will be correlated with increases in the market price or the volatility of our common stock.

In addition, upon a default or other failure to perform, or a termination of obligations, by an option counterparty, we may suffer adverse tax consequences and more dilution than we currently anticipate with respect to our common stock.

We can provide no assurances as to the financial stability or viability of any option counterparty.

In addition, the capped call transactions are complex, and they may not operate as planned.

For example, the terms of the capped call transactions may be subject to adjustment, modification or, in some cases, renegotiation if certain corporate or other transactions occur.

Accordingly, these transactions may not operate as we intend if we are required to adjust their terms as a result of transactions in the future or upon unanticipated developments that may adversely affect the functioning of the capped call transactions.

The Convertible Notes may have a material effect on our reported financial results.

We will be required to record a greater amount of non-cash interest expense in current and future periods as a result of the amortization of the debt issuance costs for the Convertible Notes.

We will report lower net income (or greater net loss) in our financial results because generally accepted accounting principles in the United States (“GAAP”) requires interest to include both the current period’s amortization of the debt issuance costs and the instrument’s coupon interest, which could adversely affect our reported or future financial results, the market price of our common stock and the trading price of the Convertible Notes.

In addition, because we have the ability to settle the Convertible Notes, upon conversion, by paying or delivering cash equal to the principal amount of the obligation and common stock for amounts over the principal amount, the shares issuable upon conversion of the Convertible Notes are accounted for using the if-converted method and, as such, are not included in the calculation of diluted earnings per share except to the extent that the conversion value of the Convertible Notes exceeds their principal amount.

Further, under the if-converted method, the dilutive shares are computed assuming the maximum dilutive

We cannot be sure that we will be able to continue to demonstrate the ability to settle the Convertible Notes in cash or that the accounting standards will continue to permit the use of the if-converted method.

If we are unable to use the if-converted method in accounting for the shares issuable upon conversion of the Convertible Notes, our diluted earnings per share could be adversely affected.

The conditional conversion feature of the Convertible Notes, if triggered, could adversely affect our financial position and liquidity.

In the event the conditional conversion feature of the Convertible Notes is triggered, holders of Convertible Notes will be entitled to convert such notes at any time during specified periods at their option.

If one or more holders elect to convert their Convertible Notes, we would be required to settle any converted principal amount of such Convertible Notes through the payment of cash, which could adversely affect our liquidity.

In addition, even if holders do not elect to convert their Convertible Notes, we could be required under applicable accounting rules to reclassify all or a portion of the outstanding principal of the Convertible Notes as a current rather than long-term liability, which would result in a material reduction of our net working capital.

Provisions in the Convertible Notes Indenture (as defined below) could delay or prevent an otherwise beneficial takeover of us.

Certain provisions in the Convertible Notes Indenture could make a third-party attempt to acquire us more difficult or expensive.

For example, if a takeover constitutes a fundamental change, then noteholders will have the right to require us to repurchase their notes for cash.

In addition, if a takeover constitutes a make-whole fundamental change, then we may be required to temporarily increase the conversion rate.

In either case, and in other cases, our obligations under the notes and the indenture could increase the cost of acquiring us or otherwise discourage a third party from acquiring us or removing incumbent management, including in a transaction that noteholders or holders of our common stock may view as favorable .

Risks Related to Legal and Regulatory Matters

3 unchanged sentences

Department of the Interior (“DOI”) to temporarily pause new oil and gas leases on federal lands and waters pending completion of a comprehensive review of the federal government’s existing oil and gas leasing and permitting program.

In June 2021, a federal district court enjoined the DOI from implementing the pause and leasing resumed, although litigation over the leasing pause remains ongoing.

In June 2021, a federal district court enjoined the DOI from implementing the pause and leasing resumed subject to certain limitations, although litigation over the leasing pause remains ongoing.

As a result, it is difficult to predict if and when such areas may be made available for future exploration activities.

In addition, in November 2021, the U.S.

Environmental Protection Agency (“EPA”) proposed a new rule that would impose more stringent methane emissions standards for new and modified sources in the oil and gas industry, and to regulate existing sources in the oil and gas industry for the first time.

A supplemental proposed rule, which may expand or modify the current proposed rule, and final rule are expected by the end of 2022.

The current proposed rule authorizes each state to incorporate the emission guidelines proposed by the EPA or to adopt their own standards that achieve the same degree of emissions limitations.

In addition, in November 2021, the EPA proposed a new rule that would impose more stringent methane emissions standards for new and modified sources in the oil and gas industry, and to regulate existing sources in the oil and gas industry for the first time.

On November 11, 2022, the EPA issued the proposed rule supplementing the November 2021 proposed rule.

Among other things, the November 2022 supplemental proposed rule removes an emissions monitoring exemption for small wellhead-only sites and creates a new third-party monitoring program to flag large emissions events, referred to in the proposed rule as “super emitters.” The EPA is currently expected to issue a final rule by August 2023.

Further, in September 2021, President Biden publicly announced the Global Methane Pledge, an international pact that aims to reduce global methane emissions to at least 30% below 2020 levels by 2030.

These efforts, among others, are intended to support the current administration’s stated goal of addressing climate change.

Potential actions of a Democratic-controlled Congress include imposing more restrictive laws and regulations pertaining to permitting, limitations on GHG emissions, increased requirements for financial assurance and bonding for decommissioning liabilities, and carbon taxes.

Any of these administrative or Congressional actions could adversely affect our financial condition and results of operations by restricting the lands available for development and/or access to permits required for such development, or by imposing additional and costly environmental, health and safety requirements.

These efforts, among others, are intended to support the Biden Administration’s stated goal of addressing climate change.

Potential actions of Congress include imposing more restrictive laws and regulations pertaining to permitting, limitations on GHG emissions, increased requirements for financial assurance and bonding for decommissioning liabilities, and carbon taxes.

Any of these executive, administrative or Congressional actions could adversely affect our financial condition and results of operations by restricting the lands available for development and/or access to permits required for such development, or by imposing additional and costly environmental, health and safety requirements.

Our ability to use net operating loss carryforwards to offset future taxable income may be subject to certain limitations.

4 unchanged sentences

In general, under Section 382 of the Internal Revenue Code of 1986, as amended (the “IRC”), a corporation that undergoes an “ownership change” can be subject to limitations on the use of its NOLs to offset future taxable income.

We underwent an “ownership change” during 2018 and, as a result, the use of our existing NOL carryforwards are subject to limitations under Section 382, which are generally determined by multiplying the value of our stock at the time of the ownership change by the applicable long term tax exempt rate as defined in Section 382.

We underwent an “ownership change” during 2018 and, as a result, the use of our existing NOL carryforwards is subject to limitations under Section 382, which are generally determined by multiplying the value of our stock at the time of the ownership change by the applicable long-term tax exempt rate as defined in Section 382 of the IRC.

See Note 10 to our financial statements.

4 unchanged sentences

federal income tax provisions currently available to oil and gas companies.

Such legislative changes have included, but not been limited to, (i) the repeal of the percentage depletion allowance for natural gas and oil properties, (ii) the elimination of current deductions for intangible drilling and development costs, and (iii) an extension of the amortization period for certain geological and geophysical expenditures.

Although these provisions were largely unchanged in the most recent federal tax legislation, certain of these changes were considered for inclusion in the proposed “Build Back Better Act” and Congress could consider, and could include, some or all of these proposals as part of future tax reform

Such legislative changes have included, but have not been limited to, (i) the repeal of the percentage depletion allowance for natural gas and oil properties, (ii) the elimination of current deductions for intangible drilling and development costs, and (iii) an extension of the amortization period for certain geological and geophysical expenditures.

Although these provisions were largely unchanged in recent federal tax legislation such as the IRA, Congress could consider, and could include, some or all of these proposals as part of future tax reform legislation.

Moreover, other more general features of any additional tax reform legislation, including changes to cost recovery rules, may be developed that also would change the taxation of oil and gas companies.

8 unchanged sentences

Any such tax increase or change could adversely impact our earnings, cash flows and financial position as it relates to these assets.

Unanticipated changes in effective tax rates or adverse outcomes resulting from examination of our income or other tax returns could adversely affect our financial condition and results of operations.

We are subject to taxes by U.S.

federal, state and local tax authorities.

Our future effective tax rates could be subject to volatility or adversely affected by a number of factors, including changes in the valuation of our deferred tax assets and liabilities, expected timing and amount of the release of any tax valuation allowances, or changes in tax laws, regulations or interpretations thereof.

In addition, we may be subject to audits of our income, sales and other transaction taxes by U.S.

federal, state and local taxing authorities.

Outcomes from these audits could have an adverse effect on our financial condition and results of operations.

A new 1% U.S.

federal excise tax could be imposed on us in connection with repurchases of our shares by us.

On August 16, 2022, the IRA was signed into federal law.

The IRA provides for, among other things, a new U.S.

federal 1% excise tax on certain repurchases (including redemptions) of shares by publicly traded domestic (i.e., U.S.) corporations and certain domestic subsidiaries of publicly traded foreign corporations occurring after December 31, 2022.

The excise tax is imposed on the repurchasing corporation itself, not its shareholders from which shares are repurchased.

The amount of the excise tax is generally 1% of the fair market value of the shares repurchased at the time of the repurchase.

However, for purposes of calculating the excise tax, repurchasing corporations are permitted to net the fair market value of certain new share issuances against the fair market value of shares repurchases during the same taxable year.

In addition, certain

exceptions apply to the excise tax.

On December 27, 2022, the U.S.

Department of the Treasury (the “Treasury”) issued a notice that it intends to publish proposed regulations addressing the application of the excise tax (the “Notice”).

To provide taxpayers with interim guidance, the Notice describes certain rules upon which taxpayers are generally entitled to rely until publication of the proposed regulations.

Whether and to what extent we could be subject to the excise tax in connection with repurchases of our shares will depend on a number of factors, including (i) the fair market value of the repurchase, (ii) the nature and amount of any equity issuances within the same taxable year of the repurchase, and (iii) the content of any future regulations and other guidance issued from the Treasury.

The excise tax would cause a reduction in our cash available on hand, which could have a negative impact on our business and operations.

Our business involves the selling and shipping by rail of crude oil, which involves risks of derailment, accidents and liabilities associated with cleanup and damages, as well as potential regulatory changes that may adversely impact our business, financial condition or results of operations.

4 unchanged sentences

Our derivative activities expose us to potential regulatory risks .

The Federal Trade Commission (“FTC”), Federal Regulatory Commission (“FERC”) and the Commodities Futures Trading Commission (“CFTC”) have statutory authority to monitor certain segments of the physical and futures energy commodities markets.

The Federal Trade Commission, FERC, and the Commodities Futures Trading Commission (“CFTC”) have statutory authority to monitor certain segments of the physical and futures energy commodities markets.

These agencies have imposed broad regulations prohibiting fraud and manipulation of such markets.

2 unchanged sentences

Legislative and regulatory developments could have an adverse effect on our ability to use derivative instruments to reduce the effect of commodity price, interest rate and other risks associated with our business .

The Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”) contains measures aimed at increasing the transparency and stability of the over-the-counter (“OTC”) derivatives market and preventing excessive speculation.

The Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”) contains measures aimed at increasing the transparency and stability of the over-the-counter derivatives market and preventing excessive speculation.

On January 14, 2021, the CFTC published a final rule imposing position limits for certain futures and options contracts in various commodities (including oil and gas) and for swaps that are their economic equivalents, though certain types of derivative transactions are exempt from these limits, provided that such derivative transactions satisfy the CFTC’s requirements for certain enumerated “bona fide” derivative transactions.

The CFTC has also adopted final rules regarding aggregation of positions, under which a party that controls the trading of, or owns ten percent or more of the equity interests in, another party will have to aggregate the positions of the controlled or owned party with its own positions for purposes of determining compliance with position limits unless an exemption applies.

The CFTC’s aggregation rules are now in effect, although CFTC staff has granted relief until August 12, 2022 from various conditions and requirements in the final aggregation rules.

These rules may affect both the size of the positions that we may hold and the ability or willingness of counterparties to trade with us, potentially increasing the costs of transactions.

5 unchanged sentences

The full impact of the Dodd-Frank Act and related regulatory requirements on our business will not be known until the regulations are fully implemented and the market for derivatives contracts has adjusted.

In addition, it is possible that the current administration could expand regulation of the over-the-counter derivatives market and the entities that participate in that market through either the Dodd-Frank Act or the enactment of new legislation.

In addition, it is possible that the Biden Administration could expand regulation of the over-the-counter derivatives market and the entities that participate in that market through either the Dodd-Frank Act or the enactment of new legislation.

Regulations issued under the Dodd-Frank Act (including any further regulations implemented thereunder) and any new legislation also may require certain counterparties to our derivative instruments to spin off some of their derivative activities to a separate entity, which may not be as creditworthy as the current counterparty.

22 unchanged sentences

All phases of the oil and natural gas business can present environmental risks and hazards and are subject to a variety of federal, state and municipal laws and regulations.

Environmental laws and regulations, among other things, restrict and prohibit spills, releases or emissions of various substances produced in association with oil and natural gas operations, and

require that wells and facility sites be operated, maintained, abandoned and reclaimed to the satisfaction of applicable regulatory authorities.

Environmental laws and regulations, among other things, restrict and prohibit spills, releases or emissions of various substances produced in association with oil and natural gas operations, and require that wells and facility sites be operated, maintained, abandoned and reclaimed to the satisfaction of applicable regulatory authorities.

There is risk of incurring significant environmental costs and liabilities as a result of the handling of petroleum hydrocarbons and wastes, air emissions and wastewater discharges related to our business, and historical operations and waste disposal practices.

1 unchanged sentence

Environmental legislation is evolving in a manner we expect may result in stricter standards and enforcement, larger fines and liability and potentially increased capital expenditures and operating costs.

The discharge of oil, natural gas or other pollutants into the air, soil or water may give rise to liabilities to governments and third parties and may require us to incur costs to remedy such discharge, regardless of whether we were responsible for the release or contamination and regardless of whether our operating partners met previous standards in the industry at the time they were conducted.

The discharge of oil, natural gas or other

pollutants into the air, soil or water may give rise to liabilities to governments and third parties and may require us to incur costs to remedy such discharge, regardless of whether we were responsible for the release or contamination and regardless of whether our operating partners met previous standards in the industry at the time they were conducted.

In addition, claims for damages to persons, property or natural resources may result from environmental and other impacts of operations on our properties.

11 unchanged sentences

Any of the above risks could impair our ability to manage our business and have a material adverse effect on our operations, cash flows and financial position.

The adoption of climate change legislation or regulations restricting emissions of greenhouse gases could result in increased operating costs and reduced demand for the o oil and natural gas we produce.

Restrictions on GHG emissions that may be imposed could adversely affect the oil and gas industry.

The adoption of legislation or regulatory programs to reduce GHG emissions could require us to incur increased operating costs, such as costs to purchase and operate emissions control systems, to acquire emissions allowances or to comply with new regulatory requirements.

The adoption of climate change legislation or regulations restricting or relating to emissions of GHGs could result in increased operating costs and reduced demand for the oil and natural gas we produce.

Restrictions on GHG emissions that may be imposed, or the adoption and implementation of regulations that require reporting of GHG emissions or other climate-related information or otherwise seek to limit GHG emissions (including carbon pricing schemes) from our operating partners, could adversely affect our business and the oil and gas industry, including by restricting our ability to execute on our business strategy, requiring additional capital, compliance, operating costs, increasing the cost of oil and natural gas products and services, reducing demand for oil and natural gas products and services, reducing our access to financial markets, or creating greater potential for governmental investigations or litigation.

For example, adoption of legislation or regulatory programs to reduce GHG emissions could require us to incur increased operating costs, such as costs to purchase and operate emissions control systems, to acquire emissions allowances or to comply with new regulatory requirements.

Such regulatory initiatives could stimulate demand for alternative forms of energy that do not rely on combustion fossil fuels.

Any GHG emissions legislation or regulatory programs applicable to power plants or refineries could also increase the cost of consuming, and potentially reduce demand for, the oil and natural gas we produce.

Consequently, legislation and regulatory programs to reduce GHG emissions could have an adverse effect on our business, financial condition and results of operations.

Moreover, climate change may be associated with increased volatility in seasonal temperatures, as well as extreme weather conditions such as more intense hurricanes, thunderstorms, tornadoes and snow or ice storms, as well as rising sea levels.

Extreme weather conditions can interfere with our production and increase our costs, and damage resulting from extreme weather may not be fully insured.

Consequently, legislation and regulatory programs to reduce GHG emissions or that address climate change could have an adverse effect on our business, financial condition and results of operations.

Additionally, the SEC issued a proposed rule in March 2022 that would mandate extensive disclosure of climate-related data, risks and opportunities, including financial impacts, physical and transition risks, related governance and strategy, and GHG emissions, for certain public companies.

We cannot predict the costs of implementation or any potential adverse impacts resulting from the rulemaking.

To the extent this rulemaking is finalized as proposed, we could incur increased costs relating to the assessment and disclosure of climate-related risks.

In addition, enhanced climate disclosure requirements could accelerate the trend of certain stakeholders and lenders restricting or seeking more stringent conditions with respect to their investments in certain carbon-intensive sectors.

Business—Governmental Regulation and Environmental Matters” and “—Climate Change” for a further discussion of the laws and regulations related to GHGs and of climate change.

3 unchanged sentences

Any shares of common stock that we may issue in the future, including securities that are convertible into or exchangeable for, or that represent the right to receive, common stock or substantially similar securities, may dilute the ownership interests of our stockholders.

In addition, future issuances of common stock under our 2018 Equity Incentive Plan or other equity incentive plans that we may adopt in the future, or in connection with an acquisition or otherwise, would also dilute the percentage ownership held by the investors who purchase shares of common stock in this offering.

The market price of our common stock could decline as a result of sales or issuances of a large number of shares of our common stock or similar securities in the market after this offering or the perception that such sales or issuances could occur.

The market price of our common stock could decline as a result of sales or issuances of a large number of shares of our common stock or similar securities in the market or the perception that such sales or issuances could occur.

Our certificate of incorporation, bylaws, and Delaware state law contain provisions that may have the effect of delaying or preventing a change in control and may adversely affect the market price of our capital stock.

Our certificate of incorporation authorizes our board of directors to issue preferred stock without any further vote or action by our shareholders.

Our certificate of incorporation authorizes our board of directors to issue preferred stock without any further vote or action by our stockholders.

The rights of the holders of our common stock will be subject to the rights of the holders of any preferred stock that may be issued in the future.

The issuance of preferred stock could delay, deter or prevent a change in control and could adversely affect the voting power or economic value of our shares.

In addition, some provisions of our certificate of incorporation and bylaws could make it more difficult for a third-party to acquire control of us, even if the change of control would be beneficial to our shareholders, including, among others, limitations on the ability of our stockholders to call special meetings, limitations on the ability of our shareholders to act by written consent, and advance notice provisions for shareholders proposals and nominations for elections to the board of directors to be acted upon at meetings of shareholders.

Delaware law generally prohibits us from engaging in any business combination with any “interested shareholder,” meaning generally that a shareholder who owns 15% or more of our stock cannot acquire us for a period of three years from the date such shareholder became an interested shareholder, unless various conditions are met.

In addition, some provisions of our certificate of incorporation and bylaws could make it more difficult for a third-party to acquire control of us, even if the change of control would be beneficial to our stockholders, including, among others, limitations on the ability of our stockholders to call special meetings, limitations on the ability of our stockholders to act by written consent, and advance notice provisions for stockholders proposals and nominations for elections to the board of directors to be acted upon at meetings of stockholders.

Delaware law generally prohibits us from engaging in any business combination with any “interested stockholder,” meaning generally that a stockholder who owns 15% or more of our stock cannot acquire us for a period of three years from the date such stockholder became an interested stockholder, unless various conditions are met.

The availability of shares for sale or other issuance in the future could reduce the market price of our common stock.

Our board of directors has the authority, without action or vote of our stockholders, to issue all or any part of our authorized but unissued shares of common stock, or issue additional shares of preferred stock, which may be convertible into shares of common stock.

Our board of directors has the authority, without action or vote of our stockholders, to issue all or any part of our authorized but unissued shares of common stock, or issue shares of preferred stock, which may be convertible into shares of common stock.

In the future, we may issue securities to raise cash for acquisitions, as consideration in acquisitions, to pay down debt, to fund capital expenditures or general corporate expenses, in connection with the exercise of stock options or to satisfy our obligations under our incentive plans.

1 unchanged sentence

We may also issue securities, including our preferred stock, that are convertible into, exchangeable for, or that represent the right to receive, our common stock.

The occurrence of any of these events or any issuance of common stock upon conversion of our currently outstanding Series A Preferred Stock or upon exercise of our outstanding warrants may dilute your ownership interest in our company, reduce our earnings per share and have an adverse impact on the price of our common stock.

The occurrence of any of these events or any issuance of common stock upon conversion of our Convertible Notes or upon exercise of our outstanding warrants may dilute your ownership interest in our company, reduce our earnings per share and have an adverse impact on the price of our common stock.

Investors in our common stock may be required to look solely to stock appreciation for a return on their investment in us.

Any payment of future dividends will be at the discretion of our board of directors and will depend on, among other things, our earnings, financial condition, capital requirements, level of indebtedness, statutory and contractual restrictions applying to the payment of dividends and other considerations that our board of directors deems relevant.

Covenants contained in the instruments governing our indebtedness and the Certificate of Designations for our preferred stock restrict the payment of dividends.

Covenants contained in the instruments governing our indebtedness restrict the payment of dividends.

Investors may be forced to rely on sales of their common stock after price appreciation, which may never occur, as the only way to realize a return on their investment.

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors